The short answer is nowhere. Unfortunately, “no-deposit car insurance” isn’t really something possible and traditional carriers don’t usually offer this. It’s not really even a term carriers officially use. Furthermore, you might want to be cautious if you are advertised or promised to get car insurance without any deposit.
What “no-deposit car insurance” means is obtaining an auto coverage policy without paying anything initially: a deposit, down payment, or just an initial payment. When you look for car insurance with no deposit, you’re basically asking an insurance provider to cover you, your vehicles, and your liabilities for free (at least, in the beginning). And no insurance companies can do that.
However, there are ways to get a low deposit and take advantage of numerous other money-saving opportunities. Let’s take a look at how car insurance deposits affect your premium and ways you can counter the extra cost and save money on your car insurance.
Car Insurance Deposits vs. First Payments
We analyzed quote samples from the top three insurers to give you an idea who can offer you a lower deposit for good drivers and how lower deposits work:
|Deposit (Initial payment)||Monthly premium||Total 6-month premium||Monthly payment (after the first deposit)|
- Use “deposit,” “down payment,” and “first payment” interchangeably, meaning you will make some sort of payment before your coverage kicks in regardless of what the company calls that payment.
- For example, in order for your coverage to become effective State Farm requires your first monthly premium but no additional deposit, essentially making the first month’s payment a deposit.
- Require a small first month premium payment as a deposit, like Progressive does. Your following monthly premiums will be higher.
- Require a deposit on top of the first month’s premium payment.
- GEICO does this, and the generally the downpayment is slightly higher than the monthly payment.
Again, this depends on the auto insurance provider but understand it’s highly unlikely you won’t have to make some sort of payment — even if it’s just your basic first premium payment — before your coverage begins. Netflix might give you a free trial month; your car insurance company probably won’t.
Common Ways to Pay Your Car Insurance Premium
Perhaps the three most common ways to pay for your car insurance are to pay monthly, semi-annually, and annually:
- Monthly: Pay your deposit and first month’s payment (if the company requires both or rolls them into one payment). Then, pay your premium each month until you’ve paid the yearly cost in full.
- In some cases, your deposit might be spread out over the course of your policy. This slightly increases your monthly payments but makes your deposit much more manageable.
- Semi-Annually*: Pay your premium every six months. Typically, you’ll pay for the first six months up front and then, at the half-year mark, you’ll pay for the final six months.
- Annually*: Pay the entire yearly cost of car insurance in one lump sum.
* Many insurers offer discounts for paying semi-annually or annually. Furthermore, companies that typically charge deposits or down payments often skip these costs or significantly lower them for people who pay semi-annually or annually.
Do You Need to Pay a Car Insurance Deposit for a Quote?
Absolutely not! While you should expect to pay some sort of deposit or first payment to activate your coverage, you should not expect to pay a deposit for a car insurance quote — especially when quotes are just initial estimates. GEICO, Progressive, State Farm, Allstate, Esurance, Liberty Mutual — too many strong and reputable auto insurance companies provide free car insurance quotes for you to pay for an estimate.
Considerations When You Want to Buy Cheap Car Insurance
Aside from saving money with a multiline policy, perhaps the most common way to get cheap car insurance is to buy only what you absolutely need. Of course, “only what you absolutely need” means different things for different people, and generally those differences boil down to whether or not you own your car outright.
Simply put, if you:
- DO own your car outright, you can get away with buying only your state’s minimum insurance requirements.
- DON’T own your car outright, you must purchase extra coverage per your bank’s or auto lender’s requirements.
- Usually, this means buying collision and comprehensive coverage in addition to your state’s minimum liability requirements.
- Sometimes people who own newer vehicles, especially vehicles they haven’t yet paid off, choose to buy extra protection in the form of gap insurance or new car replacement insurance. Note that these are extra and while they will help you in the event your car becomes totaled and you need to pay off your loan and/or buy a replacement, they won’t help you when it comes to cheap car insurance premiums.
Other factors determine how companies determine your car insurance rates, too; some factors you can control and others you can’t. For example, if you have a “very poor” credit score, you might find the most affordable premium at Mercury; if you have an “exceptional” credit score, you can find the cheapest rate with Erie. Erie also offers the cheapest car insurance for teenagers, whereas Erie, American Family, Mercury, and USAA all offer the cheapest rates for people who’ve been involved in at-fault accidents, speeding tickets, driving under the influence (DUI), and reckless driving.
We provide an outline of common factors that affect your car insurance rates and which companies provide the most affordable coverage in those situations.
Get Affordable Car Insurance Even With a Deposit
Here’s the deal: It’s highly unlikely you’re going to find car insurance without any kind of deposit or down payment, even if the deposit amount is less than your policy’s monthly premium. Providers require deposits or down payments to encourage people to maintain coverage, at least until the end of the policy, and not just keep it until they’ve had time to complete a certain task such as register their vehicle.
However, it is possible to get a low deposit and take advantage of other ways you can save money on your insurance premiums. Shopping around, keeping a clean driving record, and talking to your agent about multiline policies are just a few ways to get started.